Thompson seeks school tax abatement for new apartments

Plans for 58 units of workforce housing in the Career Path neighborhood may depend, in part, on the Park Rapids Area Schools' buy-in.

Mary Thompson with the Heartland Lakes Development Commission asked the Park Rapids School Board on Feb. 6, 2023, for a 15-year tax abatement on the increase in property value at a proposed 58-unit apartment complex west of the Meadow's Edge and Meadow View apartments. This illustration of the layout shows where the two new buildings will be located, connected by a community room for residents' use and a park relocated from the southeast corner of the parcel to the northwest.
Contributed / Heartland Lakes Development Commission

Mary Thompson, executive director of the Heartland Lakes Development Commission, gave the Park Rapids School Board a presentation Monday, Feb. 6, about two apartment buildings the HLDC is developing in the Career Path neighborhood to increase the city’s stock of workforce housing.

Superintendent Lance Bagstad acknowledged that it is difficult to recruit staff if they can’t find affordable, reasonable housing.

Thompson said the project stands to benefit the school district, not only by providing affordable housing when new teachers are hired but also by bringing in families with children.

Thompson said the rents are structured to be affordable for at least a single-income household earning $40,000 per year. She said she already has firm bids in hand for a fall construction start for a total cost of $6.1 million.

However, Thompson said, to be able to move forward with construction this fall and shave approximately $700,000 off the total project cost, the HLDC is seeking community support to avoid having to rely on Minnesota Housing Finance Agency’s workforce housing development program.


She noted that the state program would only cover 25% of project costs, requires a 1:2 match, requires using the prevailing wage rate and due to the timing of its annual application, would delay construction until 2024, by which time costs may go up.

In addition to partnerships with Hubbard County, the City of Park Rapids, the county Housing and Redevelopment Authority, lenders and the Greater Minnesota Housing Fund, Thompson said the school district could provide a key component of the project’s funding package.

Thompson asked the school board to agree to a 15-year school tax abatement on the increase in property value at the new apartment complex. She stressed that this would not take away from the market value currently being taxed.

“What happens,” she explained, “is that you agree to defer the receipt of the additional value for the period of 15 years. … So, really, what you’re doing is just delaying when you actually see the resources from that project come into play.”

Thompson said she is hoping within the next month-and-a-half to have the financing package in place for the project, including buy-in from all community partners. She said she would expect final approvals to happen in mid-summer with construction to start in September or October and completion by spring 2024.

School board chair Sherry Safratowich voiced a consensus to authorize Bagstad to explore the tax abatement proposal further and bring it back for a decision at the board’s next meeting on Tuesday, Feb. 20.

Robin Fish is a staff reporter at the Park Rapids Enterprise. Contact him at or 218-252-3053.
What To Read Next
Get Local